Today’s column might anger some people on the right and the left. Try not to react emotionally. Instead consider this as a way to point out some obvious truths to your ideological opposites.
Take a look at the Robin Hood Index chart below. It shows the effect of confiscating all of the wealth of each country’s wealthiest individual and redistributing it to the poorest 15 percent of the nation’s population:
This thought experiment might be instructive about what we should – and shouldn’t – do about widening income inequality in the U.S. and elsewhere.
The impact of taking all of the wealth from one person varies by country, based largely on population size and the wealth of the richest person. Consider what happens if we took all of the wealth ($80 billion) of Microsoft co-founder Bill Gates and redistributed it to the poor.
According to an analysis by Bloomberg News, the poorest 15 percent of Americans would get a one-time payment of $1,736 each.
Using the Bloomberg Billionaires Index, we see that adding Warren Buffett’s $60 billion would bring the payment to about $3,000. My back-of-the-envelope calculation of adding the next few billionaires — Charles and David Koch ($98.7 billion), Jeff Bezos ($48.9 billion), Mark Zuckerberg ($41.8 billion), Larry Ellison ($40.8 billion), Larry Page ($35.2 billion) and Sergey Brin ($34.3 billion) — brings the total to about $450 billion and would make the payment about $10,000 per person. It takes the next 20 or so billionaires on the list to move that to $20,000.
While a one-time payment of $20,000 might be nice for a few weeks or months, it solves precisely none of the long-term problems facing the poorest Americans. It does not:
– Improve education and career training.
– Help create more job opportunities.
– Enhance health care, including lowering infant mortality.
– Increase availability of fresh and healthy food.